TO COOPERATE OR COMPETE: HOW ARE YOU UTILISING THE POWER OF STRATEGIC ALLIANCES?
Customers are the big winners when channel partners work together
When businesses are looking to grow without going the merger and acquisition route, they commonly look at one of four strategies: market penetration, market development, product development or diversification. It makes sense that expending into new markets, increasing profitability of customers you already have, developing new products or moving into a whole new line of business would all be good ways to increase your bottom line.
But there’s another growth strategy that is frequently overlooked even though it’s often a win for the customer: coopetition.
But what is “coopetition” and how can it help your partner business to grow and bottom line?
“Coopetition” combines “competition” and “cooperation” into one idea. It may seem that these two concepts are diametrically opposed, but in fact, competitors can often benefit from cooperating with one another strategically. Doing so, however, requires creative thinking.
Far too often in the channel, resellers look at others in our industry as enemies against whom we must battle for customers, territory and
But when they think of competition this way, they may be selling themselves and their customers short. After all, while companies in an industry might be similar, they typically serve different customers and have different strengths and weaknesses. This can leave gaps between the product or service they offer, and the needs of the customer.
Coopetition in my view eliminates these gaps. Coopetition looks vertically at a market and recognises that competitors can also be a suppliers, as in the case of Microsoft and
Intel with their “Wintel” approach. It looks horizontally at markets as well, recognising that a company might have good market penetration in one region, while not in another.
Coopetition recognises these kinds of differences as opportunities for organisations to complement one another, rather than compete. This approach transforms differences into growth opportunities for both parties. Competitors then become collaborators, developing joint solutions that more completely fulfil the customer’s need.
When only one channel partner can win, customers lose. Coopetition, on the other hand, creates opportunity for all the players involved. So how does coopetition work in the real world of IT solutions selling? And is it a common practice in the MENA market?
As it turns out, coopetition has started to gain ground in the regional IT industry. Organisations in the traditional IT sector are now partnering with their peers in other sectors such as MEP, audio visual, visualisation and collaboration segment, MSPs, VARs, integrators and IT consultancies all in an effort to provide benefits to the end customer.
Whether you call it channel sales, up-selling, cross-selling, product bundling or integration, the IT industry depends on coopetition.
Look at it this way: application and infrastructure delivery is increasingly centralised. The local presence and specialised expertise that MSPs and VARs provide becomes essential to serving customers, whether they are in remote markets or have unique business needs. Let me know how your are utilising coopetition to advance your reseller business.